Ann: Corporate Presentation - Nth America Roadshow, page-12

Sprott cant get enough gold in Newfoundland.

Novo Agrees to Sell Stake in New Found Gold for C$125.9 Million

April 12, 2022 06:00 ET   | Source: Novo Resources Corp.

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KEY POINTS​

• Novo has agreed to sell its stake of 15 million shares in New Found Gold Corp. (TSXV: NFG) (“New Found” to a corporation controlled by Eric Sprott for gross proceeds of C$125.9 million pursuant to arm’s length negotiations (the “Transaction” representing an aggregate 9.3% premium to market
• Completion of the Transaction will leave Novo debt-free and with a pro-forma cash balance of almost C$97 million¹, with funds providing Novo with the flexibility to aggressively advance exploration efforts across the Pilbara and Victoria, while expediting a Feasibility Study on the Fresh component of the Company’s Beatons Creek project in Nullagine, Western Australia

VANCOUVER, British Columbia, April 12, 2022 (GLOBE NEWSWIRE) -- Novo Resources Corp. (“Novo” or the “Company”) (TSX: NVO, NVO.WT & NVO.WT.A) (OTCQX: NSRPF) is pleased to announce that it has agreed to sell its 15 million New Found shares to a corporation controlled by Eric Sprott for gross proceeds of approximately C$125.9 million pursuant to arm’s length negotiations and at a significant premium of 9.3% to New Found’s closing price of C$7.68 as of April 11, 2022.
“Novo has always considered its sizeable investment portfolio as a means to fund growth expenditure” commented Mr. Mike Spreadborough, Executive Co-Chairman of Novo. “The sale of our New Found holding at a premium of 9.3% to the closing price of C$7.68 is an excellent result and allows Novo to deleverage our balance sheet, continue to focus on optimizing operations at Beatons Creek and aggressively accelerate growth and expansion plans across Western Australia and Victoria. We would also like to thank Sprott Lending for their support since our transition to operations in late 2020.”
The first tranche of the Transaction totals 8.25 million New Found shares at C$8.35 per share for gross proceeds of C$68.9 million and is scheduled to complete on April 27, 2022 (“Tranche 1”. Tranche 1 is not subject to any regulatory approvals. The price per share payable under Tranche 1 represents an 8.7% premium to New Found’s most recent closing price and a 10.1% premium to New Found’s 10-day volume-weighted average price (“VWAP”.
The second tranche of the Transaction totals 6.75 million New Found shares at C$8.45 per share for gross proceeds of C$57.0 million and is scheduled to settle on August 5, 2022 (“Tranche 2”. The New Found shares representing Tranche 2 are subject to escrow provisions and the consent of the TSX Venture Exchange, on which New Found’s common shares trade, to the transfer of the Tranche 2 shares is required. The price per share payable under Tranche 2 represents a 10.0% premium to New Found’s most recent closing price and an 11.5% premium to New Found’s 10-day VWAP.
Pursuant to a general security agreement and terms of the US$40 million (approximately C$50.5 million) senior secured credit facility (the “Credit Facility”² with Sprott Private Resource Lending II (Collector), LP (“Sprott Lending”, Sprott Lending has consented to the Transaction and has advised Novo that it will not require repayment of the Credit Facility in full until settlement of Tranche 2. This will result in Novo being debt-free upon completion of the Transaction. Concurrently, the minimum unrestricted cash balance covenant in the Credit Facility has been increased to US$25.0 million.
Assuming completion of the Transaction and repayment of the Credit Facility, Novo’s pro-forma cash position is approximately C$97.1 million¹. This funding will provide Novo with the flexibility to aggressively advance exploration efforts across the Pilbara and Victoria, while expediting a Feasibility Study on the Fresh component of the Company’s Beatons Creek project in Nullagine, Western Australia³.
Subsequent to completion of the Transaction, the Company’s strategic investment portfolio will still include a 6.9% stake in ASX-listed joint venture partner Kalamazoo Resources Limited, a 2.2% stake in ASX-listed joint venture partner GBM Resources Ltd., and a 12.4% stake in unlisted Elementum 3D, Inc. (“E3D”. This portfolio is currently worth approximately C$21.0 million⁴.